Best way to go about this

kazwookie

Why is your mother not paying the mortage and the rest of the family ie the kids not paying her rent or board?

omoabeokuta

kazwookie wrote: »

Why is your mother not paying the mortage and the rest of the family ie the kids not paying her rent or board?

Cakeguts wrote: »

What does she want to do? You all live with her so technically there shouldn't be anything at all that she has to do in the home. She should be able to get in from work and put her feet up and watch the telly while the rest of the family do the cleaning, cooking and shopping.

Takeaway_Addict wrote: »

Does she want to put a stop to it?

Things do not always work out the way they should. Without going into detail, things went bad after my dad passed.

My sister is still in university and my brother has just finished and is looking for a career job.
I have had no choice but to step in and pay the mortgage payments as the money my mother makes from work covers other bills/debts.

VintageHistorian

The problem with renting the place out is that it comes with far more problems than most people realise. There's an assumption that you'll never have a void period, that you'll get perfect, reasonable, responsible adults as tenants, and the money will just roll in.

In reality you may find that you have several months without tenants, during which you'll need to cover the rent on wherever you and your brother are living, AND the mortgage payment on top. If you end up with dodgy tenants you may find that they trash the place on the way out, so factor in a few thousand to redecorate and bring it up to scratch. You also have certain legal responsibilities that you CANNOT just avoid with the words "I didn't know about them".

Then there's the problems that you may have to deal with even if the tenant is a perfectly decent person that causes no trouble. If the heating breaks down, YOU have to pay to get it fixed, even if that means spending a few thousand getting the boiler replaced. If next door's flat floods and water damages yours, YOU have to get the insurance company to fix it, and work around the tenant's availability too. If the company that owns the leasehold on your flat needs to fix the roof, YOU are the one who will need to pay your flat's share of the bill, and if you try to increase the rent dramatically to cover it then you may find yourself without tenants.

I think you, your Mum and the rest of your family need to sit down and have a serious discussion about the future, and come up with a plan for the next few years. Your Mum may not want to retire immediately, some people really do struggle after retirement even with perfectly organised finances. You wanting her to take a step back and wind down a bit is admirable, but what she wants also needs to be taken into account.

Planning for the next few years may include her paying down more of her debt, decluttering the house, repainting a few rooms to make it look a bit nicer (if you declutter stuff via eBay then you may find you have more space AND the paint gets paid for!). Your brother can start to save for a rental deposit on his own place (or you both cover the mortgage 50/50 so you can get some savings sorted out too), your sister can see if she still wants to live in south London or move somewhere else (don't assume that she'll want to stay, it depends on what kind of career she's looking at after university), your Mum may decide she wants to move closer to other family you have etc etc.

Obviously after losing your Dad it's been hard on all of you, especially if it was sudden and unexpected. But after five years it sounds like a proper talk about what all of you want in the future is the best way to go about it, and then all four of you are on the same page and have something to work towards. THEN you can decide if you want to rent the place out (sit down and do a serious working out of the numbers, you need to treat it like a business) or sell it and use the money to downsize for your Mum (and sister).

Hoploz

Do you mean you'll use the equity to buy another property? How will you keep the flat and release the equity? You need the funds to suit affordability checks on the repayments.

You could sell the flat and buy elsewhere. Are you talking about moving out of the area to achieve this? If so you could feasibly buy with little or no mortgage, but is everyone on board with moving out of London? if so you could potentially buy outright a three bed semi in suburbs for 300-400k depending on exact location.

Marvel1

Do you know what you must do as a landlord?

Shakin_Steve

The path that you are considering taking would be daunting even for someone experienced in these matters. It is an absolute minefield. Suffice to say that, if I ever came into a reasonable amount of money, becoming a landlord would be way down my list. From what I've read on here, it can be a nerve-shredding experience.

leespot

Would it not make more sense to sell the flat and buy elsewhere? (Preferably mortgage free). She could give you a lump sum to use as a deposit on a place of your own (if you've paid out £25k already that's not an unreasonable option)

61 is not old by any means, she hopefully has a long life ahead of her. My mother is in her late 50's and has more intention of slowing down yet - perfectly happy working.

dlmcr

I read all this and my first thought was to sell the place and use the equity to buy somewhere with cash with no mortgage.

Remove all emotion from the sitiuation and do the best and cleanest thing financially which is to sell up.

It is admirable that you are paying 25k mortgage and want to do the best for your mother but you to a degree you are putting your life on hold at the expense of her life and to an extent it is her issue that she needs to sort out - and it can be sorted out with a very good outcome because it is a zone 3 property with a lot of equity when sold - so it not as if she is destitute.

omoabeokuta

Shakin_Steve wrote: »

The path that you are considering taking would be daunting even for someone experienced in these matters. It is an absolute minefield. Suffice to say that, if I ever came into a reasonable amount of money, becoming a landlord would be way down my list. From what I've read on here, it can be a nerve-shredding experience.

Hoploz wrote: »

Do you mean you'll use the equity to buy another property? How will you keep the flat and release the equity? You need the funds to suit affordability checks on the repayments.

You could sell the flat and buy elsewhere. Are you talking about moving out of the area to achieve this? If so you could feasibly buy with little or no mortgage, but is everyone on board with moving out of London? if so you could potentially buy outright a three bed semi in suburbs for 300-400k depending on exact location.

VintageHistorian wrote: »

The problem with renting the place out is that it comes with far more problems than most people realise. There's an assumption that you'll never have a void period, that you'll get perfect, reasonable, responsible adults as tenants, and the money will just roll in.

In reality you may find that you have several months without tenants, during which you'll need to cover the rent on wherever you and your brother are living, AND the mortgage payment on top. If you end up with dodgy tenants you may find that they trash the place on the way out, so factor in a few thousand to redecorate and bring it up to scratch. You also have certain legal responsibilities that you CANNOT just avoid with the words "I didn't know about them".

Then there's the problems that you may have to deal with even if the tenant is a perfectly decent person that causes no trouble. If the heating breaks down, YOU have to pay to get it fixed, even if that means spending a few thousand getting the boiler replaced. If next door's flat floods and water damages yours, YOU have to get the insurance company to fix it, and work around the tenant's availability too. If the company that owns the leasehold on your flat needs to fix the roof, YOU are the one who will need to pay your flat's share of the bill, and if you try to increase the rent dramatically to cover it then you may find yourself without tenants.

I think you, your Mum and the rest of your family need to sit down and have a serious discussion about the future, and come up with a plan for the next few years. Your Mum may not want to retire immediately, some people really do struggle after retirement even with perfectly organised finances. You wanting her to take a step back and wind down a bit is admirable, but what she wants also needs to be taken into account.

Planning for the next few years may include her paying down more of her debt, decluttering the house, repainting a few rooms to make it look a bit nicer (if you declutter stuff via eBay then you may find you have more space AND the paint gets paid for!). Your brother can start to save for a rental deposit on his own place (or you both cover the mortgage 50/50 so you can get some savings sorted out too), your sister can see if she still wants to live in south London or move somewhere else (don't assume that she'll want to stay, it depends on what kind of career she's looking at after university), your Mum may decide she wants to move closer to other family you have etc etc.

Obviously after losing your Dad it's been hard on all of you, especially if it was sudden and unexpected. But after five years it sounds like a proper talk about what all of you want in the future is the best way to go about it, and then all four of you are on the same page and have something to work towards. THEN you can decide if you want to rent the place out (sit down and do a serious working out of the numbers, you need to treat it like a business) or sell it and use the money to downsize for your Mum (and sister).

Thank you all for your input.

Looks like a family sit-down is in order for us to decide what direction we want to go. From what you are all telling me, it would be best to sell the house and buy another one mortgage-free. Possibly means that me and my brother moving out to help with it.

I'll have a chat with them and report back if necessary.

Thanks again.

trevormax

I'm not commenting on your mothers health but something else you will need to consider is the fact that she may need to go in to a care home in the not too distant future. Anything could happen resulting in care for your mother and if the house/flat is in her name alone, it will cause problems for you getting any kind of return on your mortgage payments.

If this happens, thins like properties (houses, flats etc) belonging to your mother could be used to pay the care fee's. Deprivation of assets is something you will need to look into also if that is likely to happen any time soon.

The amount of equity (approx £430k) is no small amount and I would agree with other people that you all need to consider selling and buying somewhere cheaper with a view to getting rid of the mortgage.

A retirement property is one possibillity although maybe your mother has no desire to move to such a place. Maybe losing your father will make her wish to stay closer to the family she has left and the thought of moving somewhere on her own is something she would hate. Another option is moving somewhere cheaper and possibly buying two houses very close to eachother or even on the same street/nextdoor to eachother.

Where I live, a standard 3 bed semi-detached in a not so rough area will cost about £150k to £200k. If I go 10-20 miles away, it drops to £100k and for £200k I could easily get a large 4 or 5 bed house in a nice area. The extra commute time is not much of an inconvenience either. Something to consider.